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tv   Fast Money Halftime Report  CNBC  December 26, 2012 12:00pm-1:00pm EST

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what starts with adding a friend... ♪ ...could end with adding a close friend. the lexus december to remember sales event is on. this is the pursuit of perfection. question. do you have any plans for fiscal cliff night? let's get to the "fast money"
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halftime. all right, carl. thanks so much. welcome to the "halftime" show. four hours to go until the close. the dow has taken a turn to the negative. down 33 points. as you can see, the s&p and the nasdaq are following suit. here's what we're following on the "halftime" show. lucky '13. which stocks look like a good bet. cliff countdown. just three trading days remain for lawmakers to reach a deal and avoid going over the cliff. will they rise above and what happens to the markets if they don't? first our top story, shopped out. new data showing holiday sales grew at the slowest pace in four years. what does it all say about the health of the nation's retailers and the money you have in their stock? our traders for the hour are peat and john negarian and steven weiss. pete, begin with you, 16 of the 17 worst performers in the s&p today are retailers. >> understandably so. the expectations were so high. a lot of the analysts were
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looking for a bump of 3 to 4%. didn't get close to that. you're seeing pressure on the retail sector. even on the online side you aren't seeing the kind of move people would have expected. i think you have to take into account there's sandy, the tragedy up in newtown. a lot of different things. in front of us is the fiscal cliff. everybody has been talking about it. we've been talking about it. here we are past christmas getting very close to the 31st and still nothing resolved. for those reasons i think people are holding off. they're going to make some decisions later on. maybe those decisions don't happen until january. >> joe, you can blame what you want. you can say it's hurricane sandy, the fiscal cliff, discretionary the second best performing sector in the s&p here to date. is this a sign to start taking money off the table if you have it in the retailers? >> i think you categorize it by saying it's sprung a little bit of a leak. year to date, they've been strong. what do the allocations do? clearly you've looked at the u.s. economy and you've said it's been the services over the
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goods. money managers are taking a look at the potential recovery in manufacturing. they're looking at softening and consumer discretionary. it is on the back of sandy. it's moving into the materials and industrials. >> weiss, the rlx hit a historic high in early december. gap down, abercrombie down ralph lauren down. even though i called you my wife. >> i was going to let that go. i was assuming you were talking to pete. in macy's, i've been losing money. the stocks are extremely cheap. a lot of the retailers are cheap, but you can't ignore the data. there's been no reason to really feel good about retail except for the housing market. discount the employment numbers because of participation rate. i'm with joe. i think you have to take the money off because the next move that's going to be in the market
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is going to be in the cyclical stocks if you get a deal on the fiscal cliff. if not, then retail goes worse. we analyzed this last week and said there's big drag. >> so, doc, is the trade the prudent trade you have to take some money off the table in the retail space? the consumer, the data has shown to be good and then you get holiday numbers from master card that say we're only up .7%. >> i'll take any gains we can get. the fact that we're just about flat is a positive for me. obviously there's a pretty significant rotation and people are selling today in these retail names. you can see that because the volumes are pathetically low on the rest of the street. about 50% of normal activity so far to date whether it's options or stock or even futures. but this particular sector you look at the stocks, whether it's tiffany's, coach, or abercrombie & fitch, all of them are nearly trading full session volumes. they're certainly on track for
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that. it's the only sector in the market that is. there are other sectors that are moving, but you're not seeing any real dollars being exchanged back and forth, judge, so this is pretty clear that people are getting out of these names today as far as the funds. >> all right. our next guest isn't surprised at all by the drag in this year's holiday sales. tom stemberg is managing the high land consumer fund. good to see you. welcome back to "halftime." >> thank you for having me. >> you weren't looking for big things. it looks like you're going to be proven correct if you believe the master card numbers. what do you make of it all now? >> what we're seeing is a very, very sloppy retail environment. black friday was pretty good. the last week showed some pickup. overall i think it's been a pretty sloppy retail year. frankly, i was shocked to see the retail being so strong in the market the last few weeks. i'm not surprised at taking a nose dive today. having said that, i think what
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you really have to do is look at it company by company because the results are dramatically different across sectors and even across individual companies within sectors. ? it's not just the last couple of weeks that retail has been strong. as i mentioned leading into the segme segment, they've been strong. the data from consumers has matched what the performance of the stocks has been. >> that's true but, again, you look at what's going on out there and, frankly, i'm not that optimistic going forward. the reality is people don't think about the fiscal cliff, they think about what does this mean for me as a consumer. if i'm one of the more after fluent people in america that's supporting the coaches and tiffanys of this world, i'm going to look at a 3.8% tax increase thanks to obama care, another 4.6 tax increase if nothing happens and probably even if something does happen,
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and on top of that you have state tax increases as well. you add all of that up, if you're at the higher end you'll be cutting back some because somebody's got to give. >> you're saying the luxury retailers are the ones that we need to watch, those are the stocks that might take the biggest hit in this whole thing? >> again, it's a company-to-company thing. if you have a big business servicing tourists and tourists are doing well from asia and the arab world, maybe you'll be okay. but if you have a generalized -- yeah, i think the high end is going to be pressed and as you saw this holiday season, it appears that those people offering value did somewhat better. those people are selling consumable products did better than those selling durable products in general. >> what are your best picks? you're managing this fund. where would you put your money? the phone thing is, you know, i mention all of these stocks that are down whether it's macy's, the gap, walmart, abercrombie and others, your topics don't mention any of those. shine some light for our
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viewers. >> again, we're in the venture capital business. we invest in small emerging companies. we have a company called david's tea. they have almost 20%. we have another company called jay mclaughlin. it's in the heart of where the storms hit. they'll have high single digit comparable store sales. not everyone is struggling including those serving the higher end. if you're selling something pretty discretionary, big ticket. >> you like lu lu lemon which is a pretty interesting pick in the conversation we're having. >> well, again. that's a public company. i'm a director of a public company. i shouldn't comment. you have to love the position they built, the quality of their products. >> finally, given the fact that you used to run staples, you probably are well versed in what some would call the blame game, when numbers don't turn out to
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be what people wanted, sandy and the fiscal cliff, we may hear other excuses come down the pike, are they legit or is it real just looking forex cus? >> i think as always true, it's a combination of the two. the economy hasn't been good for quite some time so to blame the economy is probably reaching for straws. having said that, there are some legitimate things going on that have influence. one significant one people are overlooking is i believe finally next year what's called a main street fairness act is going to pass congress. what that means is amazon and others like them are going to have to begin collecting sales taxes in states across the country and don't underestimate the significance of that. if you live in new york city and you're paying close to a 10% sales tax even though when you buy something online you would be the first to pay it, if that playing field gets leveled i
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think you'll see a significant movement not so much to the retail stores of the ter rest stree al retailers but to their websites. people like staples, walmart and so forth. >> good to have you on the show. thank you for your insight. >> thanks for having me. weiss, let's trade this. apple and a.m. ma zob, he was talking about amazon, the stocks hit the lowest of the day. >> amazon is a pure retailer. they're the ones that were going to benefit the most from the online selling. there was going to be a huge internet season in terms of that being the main battleground for retail. it's not happening because the master card numbers affect that also. so i dispute one thing that he said which is don't think about the fiscal cliff. they are thinking about it in terms of what the hit is to that i shall pocketbook. point out the restaurants for a quick second. it's a very, very promotional environment. the consumer there isn't doing
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particularly well either. i think there's trouble ahead. >> then you have to take into consideration. you have bad weather coming to the northeastern part of the united states today, maybe later on in the week. you have a disproportionate number of sales coming from this end of the country. if you're looking for a push, you may not get it. >> 24% is actual spending that comes from the mid-atlantic and northeast. that will be impacted. i also think you have to look from an allocation standpoint and say the retail names that this year have seen strong performance, let's look at gap, for instance, how is gap doing today? gap is down significantly on the other side of that you have jcpenney which is not experiencing such a decline today but yet has been down significantly this year. so i think it's a matter of really selling those outperforming type of retail names and on the other side of it now, beginning to slowly allocate to some of the names that really have had a horrible year in the retail space. >> give me your best pick
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retail. gap up 70%, tjx. the worries that we may see, give me your pick? >> i would go tjx, nike and home improvement retail. i don't like the names that are being kicked around. i would rather be in the home depot, the lowe's. i believe in the housing rebound. mr. stemberg was talking about specific retail. i like the tjx's of the world. nike is still on the upper end but i think they can perform. >> what i would do is go long a name like tiffany and short a name like michael coeurs. >> i'd stay with macy's. ten times earnings. very, very cheap. i had a stake with it. >> doc? >> stephanie and i talked about -- stephanie link, that is, we talked about getting into t.j. max ahead of thanksgiving. you have a nice pop that carried you to 45, 46.
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i think you get a chance just like pete said to reload here. maybe you get a chance to reload 40. i'd buy that. they'll feast on everyone else's problems. one battleground stock is making a huge move to the upside. brian has that. >> believe it or not, scott, that is rim. research in motion is up more than 7%. 7.5%. still in the 80 cents for rim. the stock is up. not a lot of news out on rim. as we approach the blackberry 10 debut, there's been some blogs that have leaked out pictures of what may or may not be the blackberry 10 with the keyboard or not. there's a lot of concern about it looking like the iphone. they like the blackberries for the physical keyboard. it's a blog on a blog on a blog reportedly leaked out of china. it's got a hard wired keyboard attached to it. that's still a draw for people.
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that's what i'm seeing as possibly the only reason the stock may be moving today. so this is going to be a hot traded stock, guys, until january 30th, whenever that blackberry ten is supposed to officially roll out. >> likely beyond that, sully. weiss? >> i bought a little last week when it came down. of course traded down further after that. now it's trading back up. s if going to have two versions. it is going to have keyboard and it is going to have a virtual keyboard like the iphone. that will be out. on a day like today where there's low volume, you can get the stock going anywhere you want to go. jcpenney is an example. i wouldn't read any more into it than that. >> did you talk to rim today. >> i did not talk to rim. i can call them during a break. >> i swear, i think worse than hines, i think he was sitting courtside at the heat game. if he wasn't, a guy who looked exactly like him. if he was, tweet us and let us know that he was really there.
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still to come on "halftime" show, the cliff countdown and market jitters. three trading days left. why one top strategist on the street says buy those dips. first, coach is the worst performer in the s&p. what's really in the bag for the leather maker. two opinions, one stock, we debate it. later, who will emerge as the tech king for 2013. our traders tell us who they're betting on when we come back. >> announcer: "halftime "report" is brought to you by fidelity investments. and execute faster with our more intuitive trade ticket. i'm greg stevens and i helped create fidelity's options platform. it's one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account.
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are the high end retailers better equipped to weather the storm? coach shares are down 10% year to date. also the worst performer in the s&p today. should you get in on that dip? jee terranova sees it ahead. steven weiss sees the up side. luxury retail was not that good. >> it has struggled in essence. in particular if you have the exposure to the markets it has done so since april. i am looking at this from the optics of purely will you making money, purely from a trading standpoint, not from an investments standpoint. when you look at coach this is the name from the luxury brand that has the sell attached to it. the stock was up at 80, now down to 50. it has the potential for the
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emerging markets to recover. once again, it has the potential to counter some of the offensives. management has come out and said, okay, we're going to significantly spend in marketing in 2013. that's a positive. it's an example of tell me something that i don't already know. it's a sell already. i get it. down side is limited there. >> what do you say? >> here's the thing. the company came out and said that 30% of their revenues are going to be in the legends line, the new line. to me that is a definition of a fashion stock. so you've got to hope that that takes. i think coach is old news. michael coeurs is in the news. a lot of negativity on it. yes, a lot of sure. 14 times earnings at this point for that stock that's going unsure growth going forward, i'd rather go elsewhere. i wouldn't rather go to coeurs. i think that's expensive. it's not in china play. no, they have a small percentage of their sales in china and some tourist business here so you can
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forget about that, but even if it were, china sales are down. >> and i think we're saying the same thing in essence. my belief is, look, they're coming after this consumer discretionary spending. they came after the luxury end. they came after coach. there's not much juice to squeeze out. on the other side of that that gives the potential for coach to rally. >> i'd rather go to nordstrom. i'd rather play the luxury end. >> why nordstrom? >> i'm not counting on coach and coeurs. the high end consumers, there are have i few places for them to go in terms of broad line. >> the high end consumer rolls over altogether both you guys lose? >> absolutely. what i'm saying is that you're going to lose less. in the luxury space i mentioned before tiffany, i think the benefit that you have with tiffany, this is another name
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that you could play, is you've got that exposure to the potential recovery in japan. they're very thinl arguments. we don't like the luxury stores but i want to lose less. >> let's go to the jury. pete, who made the more compelling argument on coach? >> i'd have to go with steven weiss. the evenly reason why i say that, i see some potential as joe was talking about. when you're talking about growth, the fact that they don't have a footprint in china concerns me. the fact that this is on the luxury end, there's still some down side. we're not at the 52-week lows. we see that for coach so i'd stay away. >> doc, do you agree with your brother? >> yeah. sorry about that, joe. i'm waiting for the washout here. i think it comes more like 50 than 54. in july when they missed badly and the stock got scared by a bunch of analysts stampeding out of it, the stock traded down to 34. 39 million shares turned over.
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i don't think this is a panic at all yet. >> all right. that closes the case on coach. there are three trading days left for you all to stop reaching the fiscal cliff. our next guest has one of the street's most aggressive targets for stocks. john is at on pen hiem mer. good to see you again. >> good to see you. >> how are you able to look past what many others can't? >> i tell you what, scott. when you look at the situation you've got something that has to be gotten through. right now we still have considerable opportunity for argument and discussion, ruffling of feathers, for c constituencies within both the republican and the democratic party, but ultimately we go through the fiscal cliff and hold it through the fiscal cliff or over the fiscal cliff, it damages everybody, all spectrums of income, tax brackets. it would hurt the economy.
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we just don't think that politicians are that dedicated or that adamant on the positions that they hold at least today. so we think we're going to -- in terms of towards the end of the year here, it doesn't look like they're going to repair this thing before new year's day but we do think that what will happen is in january they'll get their act together and we'll get something to go forward. we think the markets will respond positively. >> you do admit that things could get a whole lot worse from a market standpoint before they get better, right? >> if nothing is done, and we just do not feel at this point that knock will be done. we think that investors who are concerned that nothing will be done and the washingtonians will stick to that through the first quarter flat second quarter should be buying puts at this point. from the perspective that we see now, from the words that came out of both the president as well as the speaker of the house
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ahead of the holiday, it really looked like they were working on things until plan b fell through. >> haven't the seeds already been sown though for next year's earnings? yet you have a really on at this mistake target for what you're looking for, 108 bucks for the s&p year end '13. are you otherly aggressive? >> i don't think so at all. in fact, we think that 1585 on the s&p, which is about 11, 12% up from where we are now at $108 versus $102 coming into this year makes sense for us. you have the emerging markets coming back online. once they get back from holiday in march and really the new transitional government -- the government that has been the transitional government starts pulling the levers, we think we'll get some stimulus. it will feed into the global
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economy. europe is still on the mend, but it is doing what it needs to do. the u.s. has been growing. we've got housing, we've got automobiles. both have put in good numbers and we would expect that our economy will be able to weather the rockiness near term and benefit from an agreement on this fiscal cliff. >> steve weiss quickly. >> john, how do you see it playing out? we've seen a lot of ends being front end loaded only to fall off and maintain the back end. with everything that's going on in terms of spending, cutting back from europe and from u.s. standpoint. how do you see it playing out next year in terms of the market action? >> in terms of the market action, what we would expect, the first quarter a lot is going to depend on what happens with the fiscal cliff. as i said before, if we move into a recession, you're not going to get a 1585 target or 2
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$108 in earnings. we're not expecting the powers that be in washington are going to be willing to save a defeat from the jaws of victory. >> you haven't watched them before, john, have you? >> i've been around for a long time. i have watched them before. i do know that they worry about legacy. the history books would write about them and say do this. >> it's good to talk to you. thank for coming on. >> thanks for having me. pete, 1585 is the price target. second highest on the street just behind bank of america. he's higher than goldman, barry knap at barclays. is he going to be right? >> i'm very confident. i like what we're hearing out of china. i like what we're seeing out of our housing market. the financials are why we are where we are right now.
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i think the financials if things start to ease up a bit, you see the did he ha the dividends coming back, i think they're going higher. >> is that the trade that works in 2013 right there, thexls financials? >> absolutely. 100%. financials are deck side and i will tell you on the dale earnhardt side, there's tremendous demand and that is the trade. >> coming up on the halftime report, we go to the pits to find out what's coming up on the trades in oil. the falling in. how this big mover is affecting exports and much more. we'll be right back. "fast money" isn't about a bull market, it will be going up down and sideways. >> in the blipg of an eye things trade. >> we're doing what we do as a living and we're august together as a team but we come at it from a different perfect spejttive. >> it's about moving the odds in
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your favor. >> it's what drives out the value of the show. >> i am stephanie link, i am "fast money." >> i am steve grasso, i am "fast money." ho >> announcer: halftime >> announcer: halftime report is sponsored by fidelity investments. innovative ideas for serious investors. from thought to trade, on every screen. and all in real time. which makes it just like having your own trading floor, right at your fingertips. [ rodger ] at scottrade, seven dollar trades are just the start. try our easy-to-use scottrader streaming quotes. it's another reason more investors are saying... [ all ] i'm with scottrade. mine was earned off vietnam in 1968. over the south pacific in 1943. i got mine in iraq, 2003. usaa auto insurance is often handed down from generation to generation. because it offers a superior level of protection, and because usaa's commitment to serve the military, veterans and their families
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welcome back. brian sullivan back with another big mover. brian, what are you watching now? >> because we're not saying the word cliff enough, i throw it out there one more time. cliff natural resources, clf. making a big move. one of the better performers. 2.4% is not a huge move. given today that is. so clf making a big move. no real news on this name today. maybe on the back of oil going up, some of the renewed confidence around china or the commodity market. i'll let you guys figure it out. my job is merely to point out movers. you can dig in. i'm the chef, you're the diners. >> we'll put the pressure on joe terranova. what do your taste buds come up with? >> his name means earth. >> new earth. >> you have to watch michelle more when she's doing the show. >> she has that pegged, 17% prices up this month over in china. signs that the economic trough
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in china are actually recovering. global inr pricing has reached the trough. 2013 looking for appreciation. >> the coal stock is moving as well and some of the steel stocks. that whole complex related to iron ore. >> oklahoma sooners trade. they're getting in and buying what everybody shunned. down 50%. you take a look at arch, anr, cliffs. and that's why they're jumping in. >> walter is the purest met coal play for steel. >> anr, big move today. crude spiking today. black gold surging 2.5%. for more on the move, let's go to cnbc.com jackie deangeles. >> how significant is the spike? check out the chart. today crude has risen to the highest level in two months. jim murio is at the cme and
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anthony grizmante is at the nymex. >> jackie, it's short covering coming into the market. i ran you naval exercises on the straits of hormuz. you have obama coming back from his vacation to deal with the fiscal cliff. we have low volume situation which moves a little bit more exaggerated. i'm not putting a lot of stock into this move. i think it's a little overdone. >> jim, good to see you for a second time today. you're looking at the chart of crude. technically speaking how important is the move in your view? >> well, this is funny. you started out the conversation with saying how significant is the move? that's what i've been dealing with all day. you look at the chart. we've been in a pretty well defined trend channel for a month or so. right now we've come to the top of it. the market is telling us the news out of the middle east and the news on the fiscal cliff is
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a pretty big deal. now it's decision time. is it big enough to take it above 91.25 and settle there? if it can't do that, it will be considered a failure. i want to be short oil and i think 8620 would be the downside. >> on the up side we're watching 9125. now you know what our guys are doing. are you buying or selling crude surge today? head to futures now.cnbc.com and vote in our poll. don't forget to check out our next online show that will be tomorrow at 1:00 p.m. scott being barks to you. we'll see you tomorrow at 1:00. right now when "halftime" comes back. we target stocks in the tech world. find out who has what it takes to become number one. first, christmas nightmare. netflix sees outages over the holiday. the bad timing that's putting the stock in our top three trade. "halftime" is coming back right after this. we're halfway through the
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trading day. still ahead on the half time report, a round of hold 'em or fold 'em. stick around for our final trade, the "halftime report" is back in 2 1/2 minutes. it's sponsored by think or trade and cme group. when you have diabetes... your doctor will say get smart about your weight. that's why there's glucerna hunger smart shakes. they have carb steady, with carbs that digest slowly to help minimize blood sugar spikes. [ male announcer ] glucerna hunger smart. a smart way to help manage hunger and diabetes.
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welcome back. it's time now for our top three trades. the first one is right on the wall behind me. there it is, it's netflix. those shares are reversing. they're up today despite the fact that the company had the untimely outage on christmas eve. they're blaming that problem on servers operated by amazon. it's up a couple of percentage points. >> reed hastings should be singing "looks like we made it" by barry manilow. talk about the timing, i actually think it was very good timing in terms of the outage. 3:30 christmas eve. no one really is paying attention or really even realizes it. it's back up and running for christmas morning when people are actually using netflix. perfect timing. stock continues to move. i think it's going above 100. >> maybe a lucky break. next, ford shares are driving higher with unusual options activity.
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pete, what do you see? >> this has been happening since monday. if you look at monday, you can see the january 13 calls why extremely active. a half day of trade and everybody was basically sleep walking. the first hour over 100,000 contracts. the second hour, extremely active. january, even more on the 13th. this is a stock that could test the 52-week high. if they hit that just above 13, people expect to see the stock get a lot higher than 13. >> pete, got to hit herbalife. what a rough week it was. now "the wall street journal" is reporting that the company has hired a legal firm to help the company defend itself against attacks by bill ackman. >> yeah, i think a lot of folks jumped on this because of the success that ackman had. they hope that whitney tillson getting on it would mean the same. it hasn't. the law firm, these are the guys that represented bush -- rather,
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gore against bush and microsoft versus the united states. they're the who's who of companies. >> david b 0oyce, he's the fame attorney. >> that's right. this is not playing around. this is going after ackman. there could be some tortious interference here. we'll have to see how big they can make. >> barry manilow, really? >> that was a song. >> come on. >> i'm with weiss on that. i don't know. >> everybody is thinking it. he said it. >> he's the man that wrote the song. >> christmas dinner with barry. >> here it is. >> we know what he got for christmas. >> it's an emotional time of year now. >> who gave it to him. >> we know what he got. >> are you going to let any lyrics come through? all right. we'll move on as "the wall street journal" highlights, the
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turf wars between apple, amazon, google is heating up. let's trade it. between apple, between google, between amazon and facebook, which stock is going to emerge as the biggest winner next year? >> apple and google, i stick with apple. we've been talking about it for a month. i continue to pound the table on the selling. for that reason alone i think that stock actually can beat out google. you bring up amazon/facebook. that's intriguing to me. i'm an owner of facebook, been an owner. i continue to own it. it's a one and done, however, unless they can show us what they can do with that mobile revenue that actually came into facebook. i was very impressed with that. the street was as well. if they can continue to do that with the with the catalyst, i think they have a 30 handle on it. >> which stock has the most to prove, is it facebook because of the obvious reasons or is it
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apple after some of the questions that we had toward the end of the year that has dragged that stock down? >> i'm trying to think how sadaka would phrase it. apple does because of the -- apple does because it was the number one stock in the market this past year and it's what all eyes go on. facebook's not as broadly owned. apple does and here comes the moment of truth as we keep pointing out in january in the report earnings. so they by far have the most to prove in terms of new product. facebook we know its mobile strategy. for apple it's more. >> who has the most to lose, doc beings on that list? >> i think apple has the most to lose. i don't think they will, but i do think they have the most to lose. and i think that another misstep with a product obviously maps didn't cause people to just toss the iphone and go for the galaxy iii. the galaxy iii over at samsung was a great phone, however, they can't have a misstep when they
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launch tv, which i believe they will launch in the first quarter 62013. >> how about, joe y the most improved? could it be amazon? >> how does amazon have to take it to the next level? do they need a phone? >> what they need to do is elevate the platform. apple has the entrenched platform. google has the entrenched plalt form. amazon has to go out and spend to get the platform to the level that apple and google is at. when you look at price mer form mans to me, spending would be the most of a drag. >> anybody can take this last one? what about facebook? this is a conversation that largely covers hardware versus software. the only company that doesn't have hardware out of that group is facebook. does facebook need a device of some sort? >> i don't think so. devices bring you lower margins even though there are rumors out there they are avenue working on a phone. just by the fact that you're asking that question, you see
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them converging. the software companies go to software and the software companies go to hardware. they're getting smaller. they're all going after the same thing. >> still to come on half ti "halftime," hold 'em or fold 'em. should you break up with two recent stock market winners? we're back in a minute. you won't take my life. you won't take our future. should you break up with two recent stock market winners? we're back in a minute. even babies. chevron is working to stop mother-to-child transmission. our employees and their families are part of the fight. and we're winning. at chevron nigeria, we haven't had a reported case in 12 years. aids is strong. aids is strong. but we are stronger. and aids... ♪ aids is going to lose. aids is going to lose. ♪ you won't just find us online,
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coming up at the top of the hour on "power lunch", before the storm hits the new york area, with no deal in sight president obama is cutting his vacation short coming back to washington, hopefully to deal with the fiscal cliff. the latest on the negotiations such as they may be. many commodities have been a losing bet this year, so why are investors still pumping billions into the sector? the winners, losers and the prospects. and the deadly winter storm that slammed the south now heading here in the northeast. the latest on its path and how it will impact your holiday travel and business overall. scott, back to you. thank you so much. the ending time is falling to 20 month lows. it comes as japan's new prime minister abbe begins his term. they're recommending a position in the yen for some time. paul richards of ubs. paul, nice to see you again.
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welcome back. >> thanks, scott. how are you doing? >> well, thanks. this call has been well for you because you nailed it where does it go from here? >> i think it's strategic and it's technical from here. strategically i like a weak yen. you now have abbe all over the b.o.j. and you have the governor, his term is coming up at the end of november. things are changing for b.o.j. a january 22 meeting, their inflation target will be raised from 1% which they're not even reaching up to 2%. however, i think the markets really, really short the yen right now. you have the timing issue of another four weeks until the b.o.j. meeting and you still have this problem that we have in washington called the fiscal cliff. i just don't like the way that one's playing out. the reason that's important is that when the market gets into risk op mode they tend to sell the dollar and buy the yen.
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what kind of levels are we talking about? >> right now we're sitting around 8570. i would comfortably sell the dollar against the yen there. i would put a stop loss at 8715 and my target is 8265. >> nice to see you. hope you had a good holiday. look forward to catching up with you. >> likewise. >> guys, what do you make of what we've seen in dollar yen? weiss, do you have a play? doc? >> well, their market turned on this pretty dramatically. it posted up 1.5% gain on the weakness out of the yen. so if that continues into next year, scott, which based on what he's just said that will not happen, in other words, we're looking at more down side pressure, i think that's good for the markets though. >> joe, tell me why the viewer watching right now should care about what the yen does? >> they should care. this is a secular move that we're talking about. all the investment banks have highlighted it. you have seen significant appreciation in the yen. this is a significant reversal.
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this is monetary and fiscal easing to the umph degree. in april you're actually going to see the governor at the bank of japan change by abbe. i think this is a structural secular move. this is all about the export economy and the companies actually exporting in japan, they will be favorable. additionally, the consumer in japan will have more spending power. those selling in japan, the revenues will be increasing. >> what are you saying, buy toyota because of a move like this? >> you could look at a name like toyota. i mentioned before tiffany i believe will do well in this environment. this will also keep all the asian currencies elevated, which is good for the china story also. >> all right. sometimes it's tough environment. i think this will also keep all the asian currencies elevated which is good for the china story also. >> all right. sometimes it's tough to buy the losers and sell the winners. let's play a little hold 'em fold 'em with stocks today. first up, g.m. treasury recently announced its
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plan to sell its stake in the car maker. what do you do? >> i think you hold it. it's a cheap stock, we're still in a recovery. the one issue could be if the yen gets incredibly, incredibly cheap, makes their autos that much cheaper. however, toyota is the largest car manufacturer in the u.s., bigger than g.m. nonetheless, it's cheap, i would hold it. i would also hold ford. >> eastman chemicals, that stock is trading at a record high, soaring 69% over the past year. the chemical company expecting a 50% increase in profits over the next three years. pete, hold it or fold it? >> it's been an under the radar stock this whole sector. the chemical sector, they remain cheap. eastman kodak -- eastman chemical on the other hand can continue to go to the upside. we have seen activity out there. they raised the dividend, raised their full year, everything is working in their favor right now. i think the stock will be in the 70s not long from now. >> coming up, which stocks appear to be sure bets in the new year? our traders tell us which companies may hold the cards to big profits.
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welcome back to the halftime report. i'm mary thompson. we're looking at shares of bank of america, the best performing stock in the dow this year, keeps on moving higher, meeting a 52-week high. up to $11.53 a share. back to you, scott. >> most of the guys on the desk like the financials heading into the new year as well. with the new year just days away, we have asked our traders for their lucky 13 picks. let's go around the horn and
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find out your best bets for the new year. pete? >> i like usg. the reason i do is for a variety of reasons, one of which is goldman just recently talked about it in a very positive manner. you also had rbc talking about it in a very positive manner, putting it as a top pick. when you look at this as the derivative off the housing play, berkshire hathaway, i think the stock's cheap. >> joe? >> talked about financials before. you will continue to see reserve releases. goldman sachs, tremendous appreciation potential in 2013. in the regionals, look for m & a activities. >> doc? >> i like vmware. i think the pause button has been hit by europe in particular and by u.s. companies as well. i think they take their finger off the pause button and this thing goes back to work. this is one of those great
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stories that just continues to move forward because of the adoption of virtualization and the cloud, whether it's amazon or anybody else. i love this play. >> we spin the wheel, whether does it stop in 2013? what's the winner? >> i think for me the winner will be short bonds, particularly the ten year. number one it's been an incredible bull market in bonds. but we're seeing flows finally come out of bond funds and go up in equity funds trickling in there. if the reason why everybody likes the market likes it because the economies are improving, that means you'll see the fed come out and trade sooner. >> let's check in quickly to see what we're working on. >> deal or no deal. we're still on the doorstep of a new year. let's start discussing the best stock trades for 2013. tweet your stock pick and we will get our traders to analyze and figure out if you have a winning trade.
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